Custom, Excise & Service Tax Tribunal
A.R.S.Metals Private Ltd vs Commissioner Of Central Excise, ... on 24 September, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/146/03
[Arising out of Order-in-Original No.4/2003 dt. 30.1.2003 passed by the Commissioner of Central Excise, Chennai]
For approval and signature:
Honble Ms.JYOTI BALASUNDARAM, Vice-President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
A.R.S.Metals Private Ltd.
Appellant/s
Versus
Commissioner of Central Excise, Chennai
Respondent/s
Appearance :
Shri T.Ramesh, Advocate Shri T.H.Rao, SDR For the Appellant/s For the Respondent/s CORAM:
Honble Ms.Jyoti Balasundaram, Vice-President Honble Dr. Chittaranjan Satapathy, Technical Member Date of hearing : 24.9.2009 Date of decision : 24.9.2009 Final Order No.____________ Per Jyoti Balasundaram The appellants herein who are manufacturers of MS ingots and operating under Section 3A of the Central Excise Act, 1944 and covered by the Induction Furnace Annual Capacity Determination Rules, 1997 had opted to pay duty monthly under the provisions of Rule 96ZO(3) of the Central Excise Rules. The total capacity of their furnace was determined as 6 MTs and annual capacity of production as 19,200 MTs. During the period April to December98, the appellants claimed abatement for the period during which furnaces were shutdown for production ; show-cause notices dt. 29.10.98 and 24.3.99 proposing to disallow abatements and demanding duty of Rs.22,68,752/- for the period April to December98 and Rs.44,39,784/- for the period Oct98 to Feb99 issued were adjudicated by the Commissioner of Central Excise vide order dt. 28.2.2001 wherein abatement for 9 days was disallowed and a total duty demand of Rs.3,59,076/- was confirmed. However, the issue of liability to interest and imposition of penalty under the Rule was kept in abeyance in view of the order of the Honble Supreme Court in the case of Union of India Vs Supreme Steels and General Mills. The duty demand was honoured by the assessees on 30.6.01. Vide the impugned order, interest has been levied and penalty imposed upon the assessees on the ground that duty of Rs.3,59,076/- was not paid at the material point of time ; hence this appeal.
2. We have heard both sides. Rule 96ZO(3) is reproduced herein :-
where a manufacturer fails to pay the whole of the amount payable for any month by the 15th day or the last day of such month, as the case may be, he shall be liable to,
(i) pay the outstanding amount of duty along with interest thereon at the rate of eighteen percent, per annum, calculated for the period from the 16th day of such month or the 1st day next month, as the case may be, till the date of actual payment of the outstanding amount, and
(ii) a penalty equal to such outstanding amount of duty, or five thousand rupees, whichever is greater. We see merit in the assessees contention that theirs is not a case of failure to pay whole of the amount payable for any month by 15th or the last day of the month for the reason that the demand was confirmed by disallowing abatement only in Feb01. In other words, amount of duty payable was determined only by the Commissioners order dt. 28.2.2001. Hence we set aside levy of interest as well as the penalty, and allow the appeal.
(Operative part of the order was pronounced in open court on 24.9.2009) (Dr.CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM) TECHNICAL MEMBER VICE-PRESIDENT gs 1 2